The investment — which follows a $10 million round last year — is a big boost especially since Pathway was nearing collapse just two years ago. In the winter of 2004, Pathway’s two executives cut the remaining 20 employees, changed product focus and waited for the investment climate to improve.

Founded in 1998, the company is now developing a way to remove blood clots and plaque from legs. Others playing in this field include Redwood, City, Calif.-based FoxHollow Technologies and Bothell-based Ekos.

Still, Pathway has won over investors with the new direction.

“We see this investment as a way to participate in an exciting market with a differentiated and compelling technology,” said HLM General Partner Dan Galles in a prepared statement. “In early clinicals, the Pathway Atherectomy System has shown great promise as an effective way to treat patients suffering from peripheral arterial disease.”

Pathway is led by Tom Clement, an early employee at Heart Technology who has been awarded 10 patents in the medical field. He said the technology is different from FoxHollow in that its scraping head moves at 60,000 revolutions per minute, rotating symmetrically to cut and remove plaque.

The investment comes after a slow second quarter in terms of investments in Seattle’s life science industry. It also follows bad news at Icos and GlaxoSmithKline, both of which said earlier this month that they plan to cut staff in Bothell.

Clement said that the company — which is in the final rounds of its clinical development and expects to be on the market with its first product in 2008 — is in a major growth mode. The 37-person company plans to nearly triple in size in the next 12 months, adding about 100 employees.